As self-driving delivery vehicles become a reality, the property and casualty insurance industry must prepare to face a rapidly shifting landscape.

A lot of people thought it was going to happen with cars first but the application of this technology is much more practical for the trucking industry.

Pleasanton, CA (PRWEB)November 22, 2016

In October, a self-driving truck from San Francisco startup company Otto, a subsidiary of Uber, drove a trailer loaded with 2,000 cases of Budweiser more than 120 miles across Colorado, while the driver relaxed in the back seat. With this foray into cargo transportation, Uber announced the launch of Uber Freight, a platform to connect shippers and trucks.

“A lot of people thought it was going to happen with cars first,” said Michael Macauley, CEO of Quadrant Information Services, “but the application of this technology is much more practical for the trucking industry.” Macauley, whose company is a leading supplier of pricing analytics services to property and casualty insurance carriers, noted that the primary motive for the impending widespread adoption of self-drive trucking is economic. Anheuser-Busch, on whose behalf the maiden Uber/Otto beer delivery was made, estimates that using fuel-efficient, self-driving trucks could lower the company’s diesel consumption by 20% to 35%, for an annual savings of $40–$50 million.2

One group not likely to benefit from autonomous trucking, noted Macauley, is truck drivers. Figures from the American Trucking Associations show that there are more than three million truck drivers in the United States, and that almost ten million people—one of every 15 workers in the country—is employed in the trucking business on some level. There is growing concern that if commercial trucking becomes completely or even largely automated, it will be economically devastating for small towns in America that thrive by way of supporting the long-haul trucking industry.3

Nevertheless, if the technology lives up to its current promise, a large-scale disruption of the trucking industry seems not only inevitable, but already under way. Mining giant Rio Tinto, for example, is now using a fleet of 240-ton driverless trucks to move iron ore in two of its Australian mines, stating that it’s cheaper and safer than using human drivers. Morgan Stanley has estimated that the freight industry could save as much as $168 billion annually by harnessing autonomous technology. The projected savings would come from lower labor costs ($70 billion), better fuel efficiency ($35 billion), increased productivity ($27 billion), and fewer accidents ($36 billion).4

A wide-open question, said Macauley, is what the resulting industry might look like. The development of self-driving vehicles in recent years has been primarily a competition between technology companies and automakers working independently of each other; that dynamic changed markedly earlier this year, however, when Google announced it would expand its testing of autonomous vehicles by installing its technology in a fleet of minivans made by Fiat Chrysler. The deal was a major departure for Google, which had previously chosen to work mostly on its own in creating and testing self-driving vehicles. For Fiat Chrysler, the arrangement allows the company to gain access to Google’s expertise in driverless cars rather than develop its own technology.5

“One thing that seems certain is that the self-drive transportation industry—both trucking and non-trucking—will go through a lot of change and development before it reaches any sort of stability. Along the way, insurance carriers will need to provide coverage appropriate to the risk levels that exist at each stage, at rates that allow them to be both competitive and profitable,” said Macauley. He admitted that for the industry, this will represent a steep—and continuous—learning curve, but emphasized that Quadrant will be focused on providing accurate, timely data to help customers compete in the rapidly changing environment.

About Quadrant Information Services:

Quadrant Information Services, headquartered in Pleasanton, CA, provides pricing analytics solutions for property and casualty insurance companies. Quadrant gives actuary, product development, pricing, sales, and marketing personnel at its client companies—which include all the major insurance carriers in the United States—the data they need to make accurate, data-driven decisions. An industry innovator since its founding in 1991, Quadrant has provided the P&C insurance field with a long series of technological advances, including InsureWatch, the industry’s first cloud-based pricing tool, which allows the user to produce unlimited combinations of reports with the click of a mouse. For more information, and to learn why Quadrant is for insurance companies that are tired of losing the right customers and winning the wrong ones, please visit http://www.quadinfo.com.